Summary
In Hines v. Bellefontaine (1943), 74 Ohio App. 393, the court found that a city may enter into a contract to lease parking meters from a private company and receive a portion of the revenue from the meters.
Summary of this case from Grendell v. Ohio Environ. Protection AgencyOpinion
No. 885
Decided October 1, 1943.
Municipal corporations — Contracts — Parking meters — Lease with option to purchase — Ordinance authorizing, valid, when — Loaning credit — Section 6, Article VIII, Constitution — Advertisement for bids — Time for — Valid, when — Structural specifications omitted — Competitive bidding — Ordinance to contain only one subject — Section 4226, General Code — Bid sufficiently conforms to advertisement, when — Contract not void, when — Based on advertisement and bid made before legislation authorizing contract — Approval by board of control effective, when — Certificate of fiscal officer to be attached to contract — Section 5625-33 (d), General Code, inapplicable, when — Funds not derived from taxation — Revenue from meters shared by company and city — City solicitor to prepare contracts — Section 4305, General Code — Statute complied with, when — Taxes paid on meters considered part of purchase price — Provision valid, when — Bidding company owned by another — Latter company bidder in legal effect — Performance bond sufficiently identifies contract, when.
1. A municipal ordinance authorizing the director of public service and safety to advertise for bids for the rental, with option to purchase, of parking meters, does not contravene the provisions of Section 6, Article VIII of the Constitution.
2. Such ordinance and advertisement, being independently authorized by the provisions of Section 3, Article XVIII of the Constitution, and of Sections 3615 and 3616, General Code, the advertisement is not rendered invalid by the fact that at the time it was made no municipal legislation was in existence providing for the installation of meters in the city streets, for the fees to be collected by means of such meters, and for the methods of enforcement.
3. When a municipality desires to acquire personal property of such a character that structural specifications cannot at the time be drawn so as to permit competitive bidding, the omission of such specifications from the advertisement for bids does not make such advertisement indefinite, and thus invalid, because of the failure to provide such basis for competitive bidding.
4. A municipal ordinance authorizing the leasing of parking meters with the privilege of purchase, is not violative of the provisions of Section 4226, General Code, requiring ordinances to be limited to one subject, where all its provisions are germane to its subject matter of the parking of vehicles in the municipality.
5. An award, based on a bid which conforms to a municipal advertisement for bids, with the exception of incorporation of a paragraph setting forth an alternative, resulting from misconception of such advertisement, is not violative of laws regulating competitive bidding for public contracts, where such alternative was not accepted and incorporated in the contract grounded on such proposal.
6. A municipal contract for parking meters, involving an expenditure of public funds in excess of $500 is not void by reason of being based on an advertisement for bids and a proposal thereto made before any legislation had been enacted authorizing the director of public service and safety to contract for such meters, where the contract is made in conformance with the requirements of Section 4328, General Code.
7. The approval, by the board of control of a city, of a contract involving the expenditure of money in excess of $500 by the department of public safety of such city, is effective, although such approval is not entered on the records of the board, the statutory provisions as to the recording of its actions being directory only.
8. The provisions of paragraph (d) of Section 5625-33, General Code, requiring the attaching of a certificate of a fiscal officer to a contract, have no application to a contract of a municipality for parking meters, when the funds applicable to the payments required to be made are to come from the receipts of the meters and not from a levy on the general tax list of the municipality.
9. A municipal contract by which a parking meter company is given the right to place and operate parking meters on the streets of the municipality, and the revenue from such meters is to be divided between the municipality and the company, does not constitute a gift of such right to the company, contrary to any provisions of the Constitution and laws of Ohio.
10. Where a city solicitor partially prepares, and fully approves, a municipal contract, the requirements of Section 4305, General Code, that he "shall prepare all contracts * * * in which the city is concerned" is sufficiently complied with, such statutory provision being directory merely.
11. A provision of a contract for the leasing of parking meters to a municipality that if certain taxes are levied upon such meters during the period of the lease, which the lessor company is required to pay, the amount so paid shall be considered part of the purchase price of the meters in addition to the price quoted, in case the city exercises its privilege of purchase, is a valid condition.
12. A proposal for a public contract, which discloses that a bidding company is a division of and owned by another company, makes the latter company the bidder in legal effect.
13. Where a performance bond of a contractor with a municipality purports to secure the performance of a contract of a certain date, a contract dated, executed and delivered under a later date, attached to such bond, and made a part of it by reference therein, identifies, in legal effect, the latter contract as being secured by the bond.
APPEAL: Court of Appeals for Logan county.
Mr. George Harris, for appellee.
Mr. Meade C. Robinson and Mr. Samuel A. Bowman, for appellants.
This is an appeal from a decree of the Common Pleas Court of Logan county, Ohio, enjoining the city of Bellefontaine, Ohio, from performing a contract entered into by it, through its director of public service and safety, with The Buckeye Incubator Company, a Delaware corporation, of Springfield, Ohio, for the leasing, with option to purchase, of certain parking meters from such company.
The action was originally brought by Paul T. Hines, a taxpayer, on behalf of the city of Bellefontaine, Ohio, as plaintiff against the city of Bellefontaine, Ohio, and Z.B. Costin as director of public service and safety of that city, defendants, to enjoin the city from entering into the contract above referred to.
Subsequently, The Buckeye Incubator Company, a corporation organized under the laws of Delaware, with its principal place of business at Springfield, Ohio, was, on its own motion, made a party defendant in the action.
Following this, plaintiff having learned that the contract had been entered into prior to the commencement of the action by him, filed an amendment and supplement to his petition, alleging such fact, and asking that the city be enjoined from performing the contract.
All the defendants then filed their joint answer to plaintiff's petition and amendment and supplement thereto.
The case was submitted to this court de novo upon the pleadings mentioned and upon a transcript of the evidence submitted at the trial of the cause in the Common Pleas Court, and upon additional testimony submitted on the trial of the cause in this court.
From the admissions in the pleadings and from the evidence, the following facts appear:
Plaintiff is a resident and taxpayer of the city of Bellefontaine, Ohio, a municipal corporation; and he brings this action as such taxpayer on behalf of the city and all its taxpayers.
On the 16th day of May, 1942, plaintiff made written demand on Meade C. Robinson, the city solicitor of Bellefontaine, that he file this action and he refused to do so.
Defendant Z.B. Costin is the director of public service and safety of such city, duly appointed, qualified and acting, and has been at all times hereinafter mentioned.
On January 29, 1942, the city council of Bellefontaine duly passed, and certified to the mayor of the city that it had passed, Ordinance No. 1674 of such city, a copy of which ordinance is as follows:
"Ordinance No. 1674
"Authorizing and directing the director of service and safety of the city of Bellefontaine, Ohio, to advertise for bids for parking meters.
"Be it ordained by the council of the city of Bellefontaine, Ohio:
"Section 1. That the director of service and safety of said city be and he hereby is authorized, directed and empowered to advertise for bids for the nine months rental, with option to purchase, of 350 parking meters, more or less, all as provided by the General Code of Ohio.
"This ordinance shall take effect and be in force from and after the earliest period allowed by law.
"Passed January 29, 1942 Dalton A. Young "Attest: President of Council "Harry E. Travis Robert B. Cook, Sr. "Clerk of Council Mayor."
Such ordinance was duly approved by the mayor of the city on January 29, 1942.
On March 3 and on March 10, 1942, the director duly published in the Daily Examiner, a newspaper printed, published and of general circulation in such city and in Logan county, Ohio, in which the city is situated, an advertisement of the receipt of bids by Z.B. Costin, director of public service and safety of such city, for a nine-month rental, with option of purchase, of 350 parking meters, more or less, until twelve o'clock noon, March 17, 1942, which advertisement is in the words and figures following, to wit:
"Advertising for bids for parking meters.
"Public notice is hereby given that the city of Bellefontaine, Ohio, will receive sealed bids for the nine months rental, with option to purchase, 350 parking meters, more or less, until twelve o'clock noon March 17, 1942. No specifications will be published other than the following instructions to bidders.
"Said meters shall be of the manual or automatic type and shall specify the coin or coins to be deposited therein, and the amount of parking time allowed for each amount deposited.
"Each bidder shall submit specifications of his meter, its method of operation and method of installation, and shall also submit a sample parking meter of the same general type he proposes to furnish under his bid.
"Each bidder shall be required to deposit with the city of Bellefontaine, a cashier's certified check on an accredited bank in the amount of $500 to guarantee his or its entrance into a contract if given the award.
"The bids shall be quoted on a trial basis for a period of nine months with option to purchase at the end of the trial period.
"The bidders must look to the receipts from the meters for the payment of the rental and purchase and shall receive all rentals from said meters during the nine months' period, or until said meters are fully paid for, less the cost of collecting the deposits in said meters.
"Said city reserves the right to order the removal of said meters at any time during the nine months' period upon thirty days notice to the successful bidder, said removal to be at the expense of the successful bidder.
"At the conclusion of the 9 months' period, the successful bidder shall credit the rents so received by him upon the purchase price of said meters, less costs of collection and the city reserves the right to renew the contract to purchase at the end of said 9 months' period under the same terms and conditions contained in the original contract.
"The bids submitted shall include the cost of installation, and said meters shall be installed at locations designated by the city of Bellefontaine.
"The bidders shall state for what period of time, if any, they will service the meters in operation and shall further specify within what period of time said meters shall be serviced or repaired after report has been made of such need by said city.
"Each bidder shall also state what accessories, if any, they will furnish with his bid, such as coin-carrying cases, parts, etc. Each bidder shall furnish a parts list with his bid.
"No person, firm or corporation shall be disqualified or prevented from submitting a bid hereon.
"The successful bidder shall furnish a performance bond in the full amount of the contract.
"The city of Bellefontaine reserves the right to reject any or all bids.
"Z.B. Costin, "Director of Public Service and Safety, "City of Bellefontaine, Ohio, "March 2, 1942."
On March 17, 1942, the director opened bids and found the bid of The Buckeye Parking Meter Company, a division of The Buckeye Incubator Company of Springfield, Ohio, to be the lowest and best.
At that time the only parking meter legislation in effect in the city of Bellefontaine was Ordinance No. 1674, above referred to, and no other such legislation was passed by council until April 13, 1942, when the council duly passed, and certified to the mayor that it had passed, Ordinance No. 1682, entitled:
"An ordinance relating to traffic and regulating the use of public streets and highways in the city of Bellefontaine, Ohio; prescribing regulations relative to the parking of vehicles upon such public streets and highways; providing for the installation, operation, maintenance, supervision, regulation and control of the use of parking meters; defining and providing for the establishment of parking meter zones upon the public streets and highways, providing for the payment thereof and for the supply of parts therefor exclusively from the receipts obtained from the operation of parking meters; providing for the enforcement hereof and providing penalties for the violation hereof; and authorizing the director of safety and service to enter into a contract for parking meters with the company submitting the lowest and best bid therefor, due advertisement having been had according to law."
The various matters set forth in the title to the ordinance are the subjects of legislation in the ordinance but the legislation on such matters is limited to and comes within the general subject of the parking of vehicles in the city of Bellefontaine.
Section 5 of this ordinance is as follows:
"Section 5. The Director of Service and Safety is hereby directed and authorized to provide for the installation, regulation, control, operation and use of parking meters in good workable condition, and said Director of Service and Safety of said city of Bellefontaine is hereby vested with the power and authority and directed to enter into a contract for two-hundred (200) parking meters, more or less, after due advertisement had, according to law, after approval by the Board of Control of the city of Bellefontaine, with the lowest and best bidder furnishing, installing and leasing, to the city of Bellefontaine two-hundred (200) parking meters, more or less, the cost of said installation and leasing to be provided for solely from receipts, funds and moneys obtained from the operation of said parking meters. It is further provided that the contract for the parking meters shall contain an agreement for a trial period of nine (9) months or less, from the completion of the installation, which will give the city the right to discontinue the operation of the parking meters at the end of said nine months' period, or before, at the option of the city, or to purchase or to renew the contract for said meters."
Such ordinance was duly approved by the mayor of the city on April 21, 1942, and was presumably published as required by law.
The bid of The Buckeye Parking Meter Company, a division of The Buckeye Incubator Company, on which bid the award of contract was made, reads as follows:
"Buckeye Parking Meter Proposal for the City of Bellefontaine, Ohio.
"This proposal is made and entered into and executed in triplicate, this 16th day of March, 1942, to furnish manual type Buckeye Parking Meters for the city of Bellefontaine, Ohio, on the following terms:
"1. We will furnish the city of Bellefontaine, Ohio, buckeye parking meters with straight nickel, which gives you one hour for each nickel; or penny-nickel type meters, which gives 12 minutes for one penny and one hour for one nickel, to be used on the streets of your city in the congested business districts, estimated at three hundred fifty (350) more or less, as needed from time to time. The meters are modern and not experimental type.
"2. The meters are to be leased or rented on a basis of $2.75 each net to us per month, payable on or before the 5th day of each month and each 30 days after the installation of said meters during the term of this lease. At the end of the nine months trial period, if all of the above rentals have been paid, we will credit you with the total amount paid from rentals and sell you the meters for a balance of $26.50. You can pay this balance less 5% cash in 30 days; or we will extend this lease on the same terms and basis until the total rental receipts amount to the balance due on the meters; and at that time we will give you a bill-of-sale covering said meters. These prices include freight and installation charges.
"3. Buckeye parking meters come complete with standard, base, one extra coin box for each meter and five free meters to the 100, or one meter with each 20 meters contracted for and installed. We will also include two carrying cases for coin boxes for the collector.
"4. Service: We will give you 30 days free service with one of our trained service men, who can teach one of your employees how to service the meters. This service will be without any charge.
"5. We have read your advertisement for bids carefully and agree to all the terms; and in regard to rentals quoted in paragraph 2, if you prefer to give us the total receipts from the meters, we will accept this in lieu of paragraph 2 and give you back 50% of the gross receipts for your policing and collecting. However, it is agreed and understood that any meters that do not take in a minimum of $2.75 per month, we will have the right to reduce the amount of meters, so that the total will average $2.75 per month.
"6. The Buckeye Meter Company agrees that all rentals are to be paid solely from meter receipts and that it will not hold the city liable for the rentals from any other source.
"7. You will find attached to this proposal the following:
"1. Specifications of our meter and method of operation and installation.
"2. Certified check for $500 on the Lagonda National Bank, Springfield, O., payable to the city of Bellefontaine, O.
"3. Parts list and prices, as called for.
"4. We will carry sufficient parts in your city to properly service the meters, so there will be no delay at any time.
"8. Warranty: The Buckeye Meter Company does hereby warrant and guarantee said meters against defects in workmanship, construction and material for a period of one year from date of installation. It is understood and agreed the Buckeye Meter Company shall not be obliged to replace any part or parts of said meters which may be damaged as a result of tampering, maliciousness, accident, act of God, or any other external force or means.
"9. Delivery: We agree to commence the installation and delivery in 20 days from time the contract is accepted by us and to complete same in another 10 days, as we have all of the materials on hand; unless prevented by strikes, fire or acts beyond our control.
"10. If at any time during the term of this lease, or any renewals thereof, any taxes are levied upon the meters herein leased, which are the property of the company, such as personal property taxes, sales tax, excise or license or use tax, or taxes of any nature, such taxes will be advanced by the company and the city shall reimburse the company in full for all taxes or assessments or license fees so advanced only from the gross receipts of the meters before the net revenue is computed for the purpose of covering any taxes. We agree to the thirty-day removal clause set forth in the legal advertisement requesting bids for parking meters.
"11. The city of Bellefontaine warrants that all necessary and proper steps have been taken by the duly constituted governmental and municipal authorities authorizing the execution of this agreement, and that all necessary or proper ordinances and/or resolutions have been adopted authorizing and providing for the installation of said meters and the operation thereof, and agrees that it will police the said meters after installation, and shall properly enforce all ordinances and resolutions pertaining thereto.
"12. No agent of the Buckeye Meter Company shall have the power or authority to alter the printed terms of this agreement, except the president or secretary.
"13. This contract shall not be binding on the Buckeye Meter Company until accepted and affirmed at its office in the city of Springfield, Ohio, by one of the officers mentioned in this paragraph and when duly accepted by both parties. No other representations or agreements, written or oral, express or implied, have been made by either party.
"Buckeye Meter Company, "A division of and owned by The "Buckeye Incubator Company. "By Geo. H. Partin, "Sales Manager."
The Buckeye Parking Meter Company is not a legal entity but is merely a designation for book-keeping purposes, of a division of The Buckeye Incubator Company, a Delaware corporation engaged in the manufacture and sale of parking meters.
No bids were advertised for or taken after the passage of Ordinance No. 1682.
Five different persons or corporations submitted bids for the furnishing of parking meters to the city in response to the advertisement, two of the bidders submitting bids for the furnishing of automatic-type meters and three for manual-type meters.
The present stage of development of parking meters is such that it is impossible to draw structural specifications upon which competitive bidding may be based, as specifications particularly and exactly describing one meter would necessarily exclude others.
In cities of the size and character of Bellefontaine, in which parking meter regulations similar to those prescribed in Ordinance No. 1682 are in effect, and in which parking meters of the type specified in the ordinance and in the contract between the city and the Buckeye Incubator Company are installed, the deposits in such parking meters average approximately four dollars per month per meter.
The contract, the performance of which is sought to be enjoined, is in writing, is between The Buckeye Incubator Company and the city of Bellefontaine, by Z.B. Costin its director of public service and safety, and is signed by The Buckeye Incubator Company by its vice-president and secretary, and by the city of Bellefontaine, Ohio, by Z.B. Costin, director of public service and safety.
While it purports to be entered into under date of the 16th day of May, 1942, it was actually executed on May 18, 1942. Before its execution it was approved by the board of control of the city, composed of Z.B. Costin, the public service and safety director of the city, and Robert B. Cook, Sr., the mayor of the city, but by reason of the absence of the clerk, such approval was not entered upon the records of the board of control.
This contract was partially prepared by and fully approved by the city solicitor of Bellefontaine, before execution, although he did not indorse his approval thereon.
The provisions of the contract, essential to the consideration of this cause, are as follows:
The Buckeye Incubator Company agrees to furnish the city of Bellefontaine, and the city of Bellefontaine agrees to accept, under the terms and conditions hereinafter provided, 350 buckeye parking meters, more or less, and The Buckeye Incubator Company agrees to install the same at locations to be selected by the city.
The meters will be installed promptly after awarding the contract, and the purchase price of the meters should include freight and installation charges.
The Buckeye Incubator Company agrees to lease or rent such meters to the city of Bellefontaine, Ohio, for a trial period of nine months and after the city of Bellefontaine has deducted from the receipts taken in by such meters each month its entire cost in connection with making the collections and maintaining such meters the company shall receive the balance of such receipts as rent for the meters, provided however, that in no event shall the company receive more than $2.75 per month per meter as rent therefor.
The city will make the collection from the meters and after deducting the collection cost and maintenance, will remit the proceeds so collected, to the company at Springfield on or before the fifth day of each month after the installation of the meters during the nine-month trial period, provided, however, that not more than $2.75 per month per meter shall be remitted to the company.
At the end of the nine-month trial period the total amount received by the company shall be calculated and divided by the number of meters which the city of Bellefontaine has leased. The amount of rental per meter thus determined shall be credited upon the purchase price of such meters, to wit $51.25 each, and the city may pay the balance, less five per cent discount for cash, within thirty days, in which event the meters shall belong fully and completely to the city, and the company will execute a bill of sale therefor.
The city shall have the option of extending this lease on the same terms until the total rental receipts received by the company shall have equalled the purchase price of $51.25 per meter for the number of meters installed, at which time The Buckeye Incubator Company will execute a bill of sale covering such meters which shall belong fully and completely to the city.
The meters shall be complete with standard, base, one extra coin box for each meter, and the company will furnish one meter free with each twenty meters contracted for and installed, and furnish two carrying cases for coin boxes for the collector.
The company shall furnish free service for the meters for thirty days and employ therefor one trained service man who shall be an employee of the company and whose duty it shall be to instruct a proper employee, designated by the city to service the meters, in such work; and the company shall keep a supply of parts in the city of Bellefontaine so that all meters shall be serviced promptly during the thirty-day free service period, and also will promptly make any necessary needed repairs to any of the meters after report has been made by the city that such repairs are needed.
All rentals are to be paid solely from meter receipts and the city shall not be liable for rentals from any other source.
The company shall commence the installation and delivery of the meters within twenty days from the time this contract is signed and complete the same in another ten days, unless prevented by strikes, fire, or acts beyond the control of the company.
If at any time during the term of this lease, or any renewals thereof, any taxes are levied upon the meters herein leased, which are the property of the company, such as personal property taxes, sales tax, excise or license or use tax, or taxes of any nature, such taxes will be advanced by the company and the city shall reimburse the company in full for all taxes or assessments or license fees so advanced only from the gross receipts of the meters before the net revenue is computed for the purpose of determining the amount of rental which The Buckeye Incubator Company received and which may be credited against the purchase price.
The city shall have the right to order the removal of the meters at any time during the nine-month period, upon thirty days notice to the company, the removal to be at the expense of the company.
In the event the installation of the parking meters shall be halted by an injunction granted by a court of competent jurisdiction, the city shall not be liable in damages to the company and the company shall have the full time provided for the installation of the meters after such injunction is disposed of.
The contract, marked Exhibit A, is attached to, and by reference is made a part of, the bond executed and delivered by The Buckeye Incubator Company as principal, and Standard Accident Insurance Company as surety, for the performance of the contract on the part of The Buckeye Incubator Company.
In the body of the bond it is recited that it is "signed and sealed at the city of Springfield, Ohio, this 16th day of April, 1942."
In the bond, the contract is referred to as being "dated the 14th day of March, 1942."
In the testating clause it is recited that the bond "has been executed this 21st day of April, 1942."
The contract attached to the bond is, as hereinbefore stated, dated May 16, 1942, but it was executed and delivered on May 18, 1942.
In the petition, amendment and supplement to the petition, plaintiff bases his right to injunctive relief against the contract, upon the following grounds, to wit:
1. The advertisement for bids is illegal in that it asks for bids on the basis of turning over the use of the streets of the city to a private corporation, and also all the net proceeds of the operation of the parking meters during the term of the contract, in such a way as to contravene Section 6, Article VIII, of the Constitution of Ohio.
2. The advertisement for bids is illegal and invalid in that at the time the bids were sought and received there was no city ordinance providing for the installation of meters in the city streets, the fees to be collected by the meters, or the methods of enforcement, and in that the advertisement is so indefinite as to make it impossible for fair competition under it.
3. Ordinance No. 1682 is illegal and invalid because it has more than one subject.
4. The bid of The Buckeye Incubator Company does not conform to the advertisement for bids and any award based thereon violates the laws of Ohio relating to competitive bidding for public contracts.
5. The contract is void because it is based on the advertisement for bids had and the bid was made before any legislation had been enacted authorizing the director of public service and safety to contract for parking meters.
6. The contract is void because it was not approved by the board of control.
7. The contract is void because no certificate was made by the auditor as to funds applicable to contract, as prescribed by paragraph (d) of Section 5625-33, General Code.
8. The contract is a gift to The Buckeye Incubator Company of the right to place and operate parking meters on the streets of the city and is for that reason contrary to the Constitution and laws of Ohio.
9. The contract is illegal and invalid for the reason it was not prepared or approved by the city solicitor before it was signed.
10. The contract is void and invalid because it does does not conform to the requirement of the advertisement for bids, that: "The bidders shall state for what period of time, if any, they will service the meters in operation and shall further specify within what period of time said meters shall be serviced or repaired after report has been made of such need by said city."
11. The contract is void and invalid for the reason it was signed for the purpose of forestalling the injunction against its execution which the city knew was then being sought by plaintiff.
12. The contract is void and invalid in that it contains the following paragraph which was not authorized by the advertisement for bids:
"If at any time during the term of this lease, or any renewals thereof, any taxes are levied upon the meters herein leased, which are the property of the company, such as personal property taxes, sales tax, excise or license or use tax, or taxes of any nature, such taxes will be advanced by the company and the city shall reimburse the company in full for all taxes or assessments or license fees so advanced only from the gross receipts of the meters before the net revenue is computed for the purpose of determining the amount of rental which The Buckeye Incubator Company receives and which may be credited against the purchase price."
In his brief filed herein, the plaintiff claims two additional grounds for relief, not based on any pleaded facts. These grounds are as follows:
A. That the bid upon which the contract purports to be based, is the bid of The Buckeye Parking Meter Company and not the bid of The Buckeye Incubator Company.
B. That the performance bond purports to secure the performance of a contract dated March 14, 1942, and consequently does not secure the performance of the contract in issue which is dated May 16, 1942, and was executed and delivered on May 18, 1942.
The plaintiff's contentions will be considered in the order hereinabove mentioned.
1. By the provisions of Section 3 of Article XVIII of the Constitution of Ohio, conferring on municipalities all powers of local self-government, general power is conferred on municipalities to acquire property by lease, with the privilege of purchase, for any municipal purpose authorized by law, and to hold, manage and control it and make any and all rules and regulations by ordinance or resolution that may be required to carry out fully all the provisions of any lease by which it may acquire property; and by the provisions of Section 3615, General Code, such power is specifically conferred; and under the provisions of Section 3616, General Code, the council of a municipality may provide by ordinance or resolution for the exercise of such power.
Ordinance No. 1674 authorizing and directing the director of public service and safety of the city to advertise for bids for parking meters, and the advertisement for bids, constitute an exercise of this power by the city.
There is no term or condition stated in the advertisement for bids, which in any way contemplates the turning over of the use of the streets of the city to a private corporation; and when the advertisement is considered as a whole it is clear that it does not contemplate that the successful bidder shall receive as rental, all the receipts from the meters during the nine-month trial period or until such meters are fully paid for, but only contemplates that such rental for the meters as the successful bidder quotes and receives during the nine-month trial period or until the meters are fully paid for, shall be paid to the successful bidder out of the receipts from the meters after the cost of collecting deposits in the meters is deducted.
Both Ordinance No. 1674 and the advertisement for bids merely contemplate the receipt of bids for the acquiring by the city, of parking meters upon a lease, with privilege of purchase.
Section 6, Article VIII of the Constitution reads in part as follows:
"No laws shall be passed authorizing any county, city, town or township, by vote of its citizens, or otherwise, to become a stockholder in any joint stock company, corporation, or association whatever; or to raise money for, or to loan its credit to, or in aid of, any such company, corporation, or association. * * *"
In the case of Wyscaver v. Atkinson, 37 Ohio St. 80, it is held that the foregoing constitutional provision inhibits the combination, in any form, of the public funds or credit of any county, city, town or township, with the capital of any other person or persons, corporated or unincorporated, for the purpose of promoting any private enterprise whatsoever.
A lease, with the privilege of purchase, of the character contemplated by the ordinance and advertisement for bids, does not come within this constitutional inhibition, as during the period of the lease the property covered by it remains the sole property of the lessor, and when and if the privilege to purchase is exercised, the property becomes the sole property of the lessee; and there does not exist at any time the combination, in any form, of the public funds or credit of the lessee municipality with the lessor corporation.
For the reasons mentioned, the first ground for injunctive relief is without merit.
2. Municipalities are authorized by law to regulate traffic, and the acquirement of parking meters is incidental to the exercise of such authority; and being incidental, constitutes a municipal purpose authorized by law, within the meaning of Section 3615, General Code, for which municipalities are authorized to acquire property by lease, with privilege of purchase.
The authority conferred is general and its exercise by way of authorizing advertisements for bids, and receiving bids, is not in any way dependent upon the existence of an ordinance providing for the installation of parking meters in the city streets, or the fees to be collected by the meters, or the method of enforcement.
The enactment of such an ordinance might reasonably be wholly dependent upon the nature of the bids received upon such advertisement.
As appears from the statement of facts, the present stage of development of parking meters is such that it is impossible to draw structural specifications upon which competitive bidding may be based, as specifications particularly and exactly describing one meter would necessarily exclude others, thus precluding competitive bidding.
The law does not require the performance of the impossible, so that where the property which a municipality desires to acquire is, as in this case, of such character that structural specifications cannot be drawn so as to permit competitive bidding based thereon, the omission of the structural specifications from the advertisement for bids does not render the proposal to receive bids indefinite or invalid by reason of not providing such basis for competitive bidding.
While structural specifications as a basis for competitive bidding are not incorporated in the proposal to receive bids, the terms of the proposal are definite and are of such character as to permit fair competition among the bidders.
This being the case, the second ground for injunctive relief is without merit.
3. As appears from the statement of facts, all of the provisions of Ordinance No. 1682 are germane to the subject of the parking of vehicles in the city of Bellefontaine, and consequently the ordinance does not violate the provisions of Section 4226, General Code, requiring ordinances to be limited to one subject. Priest v. City of Wapakoneta, 24 Ohio Law Abs., 214; appeal dismissed, 132 Ohio St. 527, 9 N.E.2d 292.
4. The bid of The Buckeye Incubator Company, except as to the alternative set forth in paragraph five thereof, conforms in all respects to the advertisment for bids. This alternative is based on a misconception of the terms of the advertisement, which are considered in our discussion of the first ground for injunctive relief. This alternative was not accepted by the city and is not incorporated in the contract so that its inclusion in the bid in no way affects the validity of the bid or the contract based thereon.
5. This ground for injunctive relief is based on the provisions of Section 4328, General Code, relating to the letting of contracts by the director of public service of a municipality, and reading as follows:
"* * * When an expenditure within the department, other than the compensation of persons employed therein, exceeds five hundred dollars, such expenditure shall first be authorized and directed by ordinance of council. When so authorized and directed, the director of public service shall make a written contract with the lowest and best bidder after advertisement for not less than two nor more than four consecutive weeks in a newspaper of general circulation within the city."
The expenditure contemplated by the contract by way of rentals and/or of purchase (if the privilege of purchase is exercised) exceeds the sum of $500. The fact that the contract comprehends an escape clause whereby the city has the right to order the removal of the parking meters at any time, upon thirty days notice, during the nine-month trial period, at the expense of the company, and might, by doing so promptly after installation of the parking meters, limit the actual expenditure under the contract to less than $500, does not change the amount of the expenditure contemplated by the contract as being in excess of $500, and until the city exercises its right under such escape clause, the expenditure contemplated by the contract is in excess of $500.
The funds out of which such expenditure is to be made, although not raised by taxation, are public funds.
From the terms and context of the statutory provision last mentioned it is clear that it is the legislative intent that such provisions should operate as a limitation on the expenditure of public funds whether such funds are derived from taxation, or otherwise.
The contemplated expenditure being in excess of $500, and the funds from which it is to be expended being public funds, the contract comes within the purview of the statutory provision mentioned.
Ordinance No. 1674 did not authorize or direct the director of public service and safety of the city to enter into any contract for acquiring parking meters, and there was no ordinance or statute in existence at the time of the advertisement for and the receipt of bids, authorizing or directing the director to enter into such contract. Consequently any authority the director had to enter into the contract in question, is conferred by Ordinance No. 1682 which was not adopted and did not become effective until after advertisement for bids had and bids received, as hereinbefore mentioned.
Section 5 of the ordinance mentioned does confer power and authority upon and directs the director to enter into a contract for 200 parking meters, more or less, after due advertisement had according to law, after approval by the board of control of the city of Bellefontaine, with the lowest and best bidder furnishing, installing and leasing to the city of Bellefontaine, 200 parking meters, more or less, upon terms identical with those set forth in the advertisement for bids, the bid of The Buckeye Incubator Company and the contract entered into between the city and The Buckeye Incubator Company.
The contract was made after this ordinance, authorizing and directing the director to make the expenditure contemplated thereby upon the terms mentioned therein, became effective, so that the making of such expenditure in the manner prescribed in the contract conforms to the requirement of the first clause of such statutory provision.
The contract was also made with the lowest and best bidder, after advertisement, as prescribed in the second clause of such statutory provision, unless the fact that such advertisement was had pursuant to Ordinance No. 1674, prior to the effective date of Ordinance No. 1682, constitutes a non-compliance with such statutory provision.
It will be noted that under the second clause of this statutory provision the power of the director to make a written contract after authorization and direction, is limited only by the condition that the contract shall be made with the lowest and best bidder, after advertisement as therein provided, and there is no requirement that such advertisement shall be had after such authorization and direction.
The purpose of this provision is to require competitive bidding upon contracts coming within its purview.
Under the provisions of Section 3, Article XVIII of the Constitution, and Sections 3615 and 3616, General Code, full power and discretion were vested in the city to provide by ordinance for the receipt of bids of the character in question, either prior to, concurrent with, or subsequent to authorizing by ordinance the making of the contract.
The terms of the advertisement published by the director, pursuant to ordinance authorizing the director to advertise for bids, were such as to provide for competitive bidding in conformity with the purpose of the second clause of the statutory provision mentioned, and the making of the contract authorized by the ordinance subsequently adopted, based on this advertisement and on the receipt of bids pursuant thereto, conforms in all respects with the second clause of such statutory provision.
The making of the contract in the manner it was made also conforms to the provisions of the ordinance authorizing the making thereof, with reference to competitive bidding, as in this respect the provisions of the ordinance are the same in legal effect as the requirements of the second clause of the statutory provision mentioned.
The contract as made, therefore, conforms to all the requirements of the statutory provision as well as to all the requirements relating to the same subject matter of the ordinance authorizing the same, and the fifth ground for injunctive relief is without merit.
6. As shown by the statement of facts, the contract was approved by the board of control of the city before it was executed, although minutes of such approval were not entered upon the record of the board.
The provisions of the statute as to the recording of actions of the board are directory and not mandatory, so that such approval is effective although not entered upon the records of the board. Such entry may be made at any time to conform with such directory requirement.
7. The provisions of Section 5625-33 (d), General Code, have application only to disbursements made by municipalities, of funds arising from a levy on the general tax list. Comstock v. Incorporated Village of Nelsonville, 61 Ohio St. 288, 294, 56 N.E. 15; Holland v. Grafton, 24 Ohio Law Abs., 642, 644.
As the funds applicable to the payments required to be made by the contract do not arise from a levy on the general tax list, the provisions of Section 5625-33 (d) are not applicable thereto, and no certificate of the auditor was essential to the validity of the contract.
8. The discussion of ground one for injunctive relief is applicable to this ground.
For the reasons mentioned in such discussion, the contract does not constitute a gift to The Buckeye Incubator Company, of the right to place and operate parking meters on the streets of the city, and is not contrary to the Constitution and laws of Ohio.
9. While Section 4305, General Code, provides that the solicitor shall prepare all contracts, bonds and other instruments in writing in which the city is concerned, such provisions are merely directory.
As shown by the statement of facts, the city solicitor partially prepared and fully approved the contract in question, which constitutes compliance with the requirement of this section. The contract was therefore valid notwithstanding it was not fully prepared by the city solicitor.
10. The contract fully complies with and conforms to the requirement of the advertisement for bids that the bidders shall state for what period of time, if any, they will service the meters in operation and shall further specify within what period of time such meters will be serviced or repaired after report has been made of such need by the city.
11. Until the action for injunction was filed and temporary injunction allowed, and service had on the city, the city had the legal right to proceed with the execution of the contract, so this ground is without merit.
12. The provision of the contract which is the subject of ground twelve for injunctive relief merely provides that in the event certain taxes are levied upon the parking meters during the term of the lease, which the lessor company is required to pay, the amount so paid by it shall be considered as part of the purchase price of the meters, in addition to the price quoted in case the city exercises its privilege of purchase.
It is in strict conformity with the advertisement for bids and is a valid condition of the bid and contract.
Plaintiff's right to relief is limited to the allegations of his petition and amendment and supplement to the petition, but we will nevertheless consider the two additional grounds for relief argued in plaintiff's brief, not based on any pleading of facts.
A. The bid discloses that the Buckeye Parking Meter Company is a division of and owned by The Buckeye Incubator Company. The legal effect of such disclosure is to constitute The Buckeye Incubator Company the bidder.
B. While the performance bond in terms purports to secure the performance of the contract dated March 14, 1942, the contract dated May 16, 1942, which was executed and delivered May 18, 1942, as shown by the statement of facts, is attached to the bond and, by reference in the bond, made a part of it, which has the legal effect of identifying the contract dated May 16, 1942, as being secured by the bond.
For the reasons mentioned, none of the grounds assigned by plaintiff for injunctive relief have any basis in law or equity. Consequently the court finds on the issues joined, in favor of the defendants, and dismisses plaintiff's petition at his costs and remands the cause for execution.
Decree for appellants.
JACKSON AND CARPENTER, JJ., concur.
CARPENTER, J., of the Sixth Appellate District, sitting by designation in place of MIDDLETON, J., of the Third Appellate District.